Los Angeles officials want to save thousands of affordable apartments from losing their affordability.
The City Council has instructed staff to come up with a spending plan to preserve properties at risk of losing their affordability restrictions before they expire, City News Service reported via KNX News 97.1 FM.
The Housing Department identified 193 properties with 5,929 affordable units where affordability programs supporting them are expected to sunset on Dec. 31, 2027. These properties have historically been categorized as “at-risk.”
The department targeted 23 properties, representing 460 units, it considers “at-risk, high priority” of losing their affordability restrictions. The properties have covenants set to expire in the next five years, with no protections to preserve affordability.
It would cost the city nearly $166 million to preserve the 23 “at risk, high priority” properties, a report from the Housing Department said.
There are two ways to pay to preserve them, city officials say.
The first includes addressing the cost of preserving affordability by paying the difference between the cost of rent at the time of covenant creation, and current market rate rents.
Another way is to renovate and fix deferred maintenance, improve accessibility and modernize apartments. It’s not clear how the latter upgrades would preserve affordability.
City officials have identified four potential funding sources to expand affordable housing preservation, including the federal HOME program, the state Permanent Local Housing Allocation (Senate Bill 2) and Linkage Fee funds.
But officials are wary of the state and federal funding sources because there are specific usages if the city were to be awarded the money, according to City News. HOME funds are now obligated to the Affordable Housing Managed Pipeline — prioritizing construction of new units rather than preservation.
The fourth funding source, officials say, could be the city’s United to House L.A. The Measure ULA transfer tax has two spending categories that could cover preservation.
California’s Affordable Housing Preservation Notice Law requires property owners intending to exit an affordability program, including subsidy contracts, regulatory agreements or covenants, to provide sufficient advance notice to impacted residents and their local government.
Property owners are expected to file paperwork with the California Department of Housing and Community Development and the Mayor’s Office.
— Dana Bartholomew
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